Garau Germano, P.C. v. Robertson
| Decision Date | 19 August 2019 |
| Docket Number | Court of Appeals Case No. 18A-CT-2739 |
| Citation | 133 N.E.3d 161 |
| Parties | GARAU GERMANO, P.C., and Faith Fenner, Appellants-Plaintiffs, v. Stephen W. ROBERTSON (Commissioner of the Indiana Department of Insurance and Administrator of the Indiana Patient's Compensation Fund), Indiana Department of Insurance, and Indiana Patient's Compensation Fund, Appellees-Defendants. |
| Court | Indiana Appellate Court |
Attorneys for Appellants: Jerry Garau, Barbara J. Germano, Garau Germano, P.C., Indianapolis, Indiana
Attorneys for Appellees: Curtis T. Hill, Jr., Attorney General of Indiana, Thomas M. Fisher, Solicitor General, Bryan R. Findley, Julia C. Payne, Mollie A. Slinker, Kian J. Hudson, Deputy Attorneys General, Indianapolis, Indiana, A. Richard M. Blaiklock, Charles R. Whybrew, Lewis Wagner, LLP, Indianapolis, Indiana
[1] The law firm of Garau Germano, P.C., ("Garau Germano") and its client Faith Fenner ("Fenner") (collectively "the Plaintiffs") filed a complaint for declaratory judgment and mandate against the Indiana Patient's Compensation Fund ("PCF"), the Indiana Department of Insurance ("IDOI"), and Stephen W. Robertson, the Commissioner of the IDOI and the Administrator of the PCF ("the Commissioner") (collectively "the Fund Defendants"). In their complaint, the Plaintiffs sought to prevent the Fund Defendants from requiring that a claimant's periodic payments agreement with a qualified health care provider pay out the provider's maximum liability under the Indiana Medical Malpractice Act ("MMA") before the claimant can gain access to the PCF. The Plaintiffs appeal the trial court's order granting the Fund Defendant's motion to dismiss and present three issues for our review, which we reorder and restate as:
[2] We affirm.
[3] Garau Germano is a law firm that represents over one hundred clients with medical malpractice claims, one of whom is Fenner. Garau Germano's fees are based on the amount its clients recover from the health care providers and the PCF. At the time of the Plaintiffs' complaint in the instant case, Fenner was seventy-three years old. Represented by Garau Germano, Fenner is pursuing a claim for medical malpractice under the MMA, alleging that her husband's death in February 2016 was caused by the negligence of various qualified health care providers.
[4] The MMA, codified at Title 34, Article 18 of the Indiana Code, allows a patient or the representative of a patient to bring a malpractice claim for bodily injury or death. Atterholt v. Robinson , 872 N.E.2d 633, 639 (Ind. Ct. App. 2007) (citing Ind. Code § 34-18-8-1 ; Goleski v. Fritz , 768 N.E.2d 889, 891 (Ind. 2002) ). The MMA was designed to curtail liability for medical malpractice. Id. (citing Chamberlain v. Walpole , 822 N.E.2d 959, 963 (Ind. 2005) ).
[5] For an act of malpractice that occurs after June 30, 1999 and before July 1, 2017,2 such as the malpractice alleged by Fenner, the MMA provides that the total amount recoverable for an injury or death of a patient may not exceed $1,250,000. Ind. Code § 34-18-14-3(a)(3). A qualified health care provider is liable for the initial $250,000 of damages,3 and the remainder of the judgment or settlement amount is paid from the PCF.4 Id. § 34-18-14-3(b)(1), (c) ; Robinson , 872 N.E.2d at 639. Thus, if a plaintiff obtains a judgment against a health care provider in excess of this $250,000 limit, the remainder of the judgment, up to $1,000,000 (for a total recovery of $1,250,000), is paid from the PCF. See M.O. v. Ind. Dep't of Ins. Patient's Comp. Fund , 968 N.E.2d 254, 259 (Ind. Ct. App. 2012) (citing Atterholt v. Herbst , 902 N.E.2d 220, 222 (Ind. 2009), clarified on reh'g , 907 N.E.2d 528 (2009) ), trans. denied .
[6] If a health care provider decides to settle a claim with a plaintiff, there are two ways in which that plaintiff may be eligible to recover additional damages from the PCF. The provider may simply pay the first $250,000. Green v. Robertson , 56 N.E.3d 682, 691 (Ind. Ct. App. 2016) (citing Ind. Code § 34-18-15-3(b) ), trans. denied . The provider may alternatively agree to a settlement involving what is termed a periodic payments agreement.5 If a provider opts to discharge its possible liability through such a periodic payments agreement, then "the amount of the patient's recovery from a health care provider in a case under this subsection is the amount of any immediate payment made by the health care provider or the health care provider's insurer to the patient, plus the cost of the periodic payments agreement to the health care provider or the health care provider's insurer." Ind. Code § 34-18-14-4(b).
[7] In cases, such as this one, where the act of malpractice occurred after June 30, 1999 but before July 1, 2017, to determine the limitations on recovery stated in Indiana Code subsections 34-18-14-3(b) and -(3)(d):
[8] In other words, to determine whether a provider has reached the limits on its liability, thereby triggering access to the PCF, the total cost of the present payment to the patient plus the cost of procuring a periodic payments agreement must exceed $187,000. See Herbst , 902 N.E.2d at 222 () (citations omitted); Green , 56 N.E.3d at 691 () (citing Ind. Code § 34-18-14-4(b) ).
[9] The Plaintiffs claim that the Fund Defendants do not follow the language of the statute as explained in Herbst and Green and impose an additional non-statutory requirement before allowing a claimant access to the PCF. Specifically, they allege that the Fund Defendants also require that a periodic payments agreement pay out the provider's maximum liability before allowing a claimant to access the PCF. In other words, not only must the cost of the present payment plus the cost to procure a periodic payments agreement exceed $187,000, but the amount of the present payment plus total amount paid out over time must also equal $250,000.7
[10] The Plaintiffs assert that the MMA does not require a periodic payments agreement to pay out the health care provider's maximum liability and instead contend that a claimant may gain access to the PCF merely by entering into a settlement agreement where the present payment, plus the cost to the provider to procure a period payments agreement, costs more than $187,000. See Herbst , 902 N.E.2d at 222 ; Green , 56 N.E.3d at 691.
[11] Such periodic payments are usually procured by the provider purchasing an annuity.8 Interest rates are now very low. Thus, in order to purchase an annuity where any present payment plus the total amount paid out of the annuity over time amounts to $250,000 requires the future payments to be paid out over decades. This is an issue with an elderly plaintiff such as Fenner, who, in order to gain access to the PCF, might agree to a settlement including an annuity that would not pay out over her expected lifetime. This, the Plaintiffs contend, "forces older claimants to forfeit a portion of a recovery which is already limited by the terms of the [MMA]," whereas "younger victims of medical malpractice can structure their annuities in such a way that they likely will receive the payments in their lifetime[.]" Appellants' Br. at 10.
[12] Garau Germano alleges that it often settles claims with health care providers via periodic payments agreements that grant its clients access to the PCF. Garau Germano represents Fenner and many similarly situated clients "who face the effective forfeiture of a portion of their already limited settlements because of the Fund Defendants' requirement that periodic payments agreements pay out the health care provider's maximum liability." Id. at 11. Because of the Fund Defendants' policy, Garau Germano claims that it cannot advise its clients to accept a periodic payments agreement that costs over $187,000 but that does not pay out the health care provider's maximum liability over time.
[13] Fenner claims she is therefore unable to evaluate any potential settlement offers or options because of the Fund Defendants' interpretation of the MMA. Fenner alleges that if she were to purchase an annuity as part of a settlement, she "may be required to essentially forfeit a portion of any settlement she receives from the defendant health care providers in her action." Appellants' App. p. 35. She does not, however, allege that she has received any actual settlement offers.
[14] On October 3, 2017, Garau Germano filed a verified complaint for mandate against the Fund Defendants, which sought a mandate to prohibit them from requiring that a claimant's periodic payments agreement pay out the health care provider's maximum liability before granting that claimant access to the PCF.
[15] On January 12, 2018, the Fund Defendants filed a motion to dismiss Garau Germano's...
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